Silver Fern repays wage subsidy, declares $12.4m dividend

Silver Fern Farms retained all of its 7,000 staff. Photo / File

Silver Fern Farms, the country's largest red meat company, has confirmed it has paid back its $43.3 million covid-19 employee wage subsidy to governmentwhile declaring a dividend to the shareholder cooperative of $12.4 million.

The payments, first reported by the Herald in late May, come on the back of the $70.7 million net profit the company announced mid April, with a dividend to its farmer-owned cooperative and co-owner Shanghai Mailing Aquarius deferred at the request of the shareholders until the outlook for the global trading environment had become clearer.

The operating company had reported revenue of $2.6 billion for the year, on the back of increased exports, particularly into China, reflecting the impact of African swine fever on that market.

Co-chair Rob Hewett said while the world is still dealing with the covid-19 pandemic, the Dunedin-based firm had managed to export food to customers who were willing to pay for "safe, trusted and sustainably produced food from NZ". He said the company had retained all of its 7,000 staff through its 14 processing sites across NZ.

Cooperative chair Richard Young said the earlier decision to defer the dividend and retain cash within the business during an uncertain period was "the right decision at the time."

"We believe that shareholders should be the first port of call for financial support."

Cash reserves

Young said that with cash reserves over and above redeemable rebate shares and claims at $1.25 million, the board determined "it would take the opportunity to build cash reserves in the cooperative." Farmer-shareholders will receive $7.9 million with the remaining $4.5 million retained.

Competing cooperative meat company Alliance Group has yet to pay back the $33.1 million it received in subsidies for its 4,913 workers, but said it will invest an additional $3.2 million at its Lorneville plant near Invercargill, upgrading its refrigeration for four cold stores, blast freezers and product chillers.

The plant is the group's largest and in peak season employs about 2,000 workers. It will also receive $4 million in total investments to reconfigure its venison processing operation, supported through $2.8 million in loans from the Provincial Growth Fund.

Group chief executive David Surveyor said the multi-million investment underlines Alliance's commitment to Lorneville and to Southland, which is reeling from news that the Tiwai Point aluminium smelter will likely close next year, with the potential loss of 2,600 highly paid jobs.